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JPMorgan et al “Do the Dirty” After the COMEX Close

29 August 2018 — Wednesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM

The gold price was up a dollar or so by around 8:20 a.m. China Standard Time on their Tuesday morning, but then was sold down a couple of bucks until around 1:40 p.m. CST on their Tuesday afternoon. The subsequent rally topped out shortly before 11:30 a.m. in London — and then chopped mostly sideways until the afternoon gold fix. ‘Da boyz’ showed up at that point — and sold it steeply lower until 10:30 a.m. in New York trading. It didn’t do much after that until the COMEX close — and then they really went to work, with the low tick of the day coming shortly after 3 p.m. in after-hours trading. The price didn’t do a lot after that.

The high and low ticks in this precious metal were reported by the CME Group as $1,215.70 and 1,201.00 in the October contract — and $1,220.70 and $1,205.80 in December.

Gold was closed in New York yesterday at $1,200.50 spot, down $10.30 from Monday. Net volume in October and December combined was a bit over 288,000 contracts — and roll-over/switch volume was only around 5,440 contracts.

JPMorgan et al took silver on an almost identical price journey, with all the price inflections points coming at about the same time. They made several attempts to get silver below the $14.625 spot mark in after-ours trading, but couldn’t — and it rallied a nickel or so into the close from there.

The high and low ticks were recorded as $14.95 and $14.605 in the September contract.

Silver was closed at $14.69 spot, down 17 cents from Monday’s close. Net volume was pretty quiet at about 28,150 contracts, but roll-over/switch volume out of September and into future months was ginormous at 67,350 contracts.

Generally speaking, platinum was forced to follow a similar price path as gold and silver. Its low was set in after-hours trading as well — and it then rallied a few dollars after that going into the 5:00 p.m. EDT close of trading. Platinum finished the Tuesday session at $788 spot, down 13 bucks on the day.

The palladium price chopped mostly sideways until 1 p.m. CEST in Zurich/7 a.m. in New York — and its rally from there going into the afternoon gold fix in London was capped as well. You know the rest. Palladium was closed at $936 spot, down 10 dollars on the day.

The dollar index closed very late on Monday afternoon in New York at 94.76 — and began to chop quietly lower the moment that trading began at 6:00 p.m. EDT a few minutes later. The 94.68 Far East low tick was set around 8:40 a.m. China Standard Time on their Tuesday morning — and it began to ‘rally’ from there. That lasted until the 94.91 high tick of the day was set around 1:15 p.m. CST on their Tuesday afternoon — and it began to chop steadily lower from there. The 94.43 low tick was set right at the afternoon gold fix in London — and it jumped higher by about 20 basis points during the next twenty or so minutes of trading. It gave up half those gains by 1:40 p.m. EDT…ten minutes after the COMEX close. At that point it began to ‘rally’ anew — and that lasted only until 2:30 p.m. It traded flat from there into the close. The dollar index finished the Tuesday session in New York at 94.72…down 4 basis points from Monday’s close.

I’ll point out once more that it matters not what’s going on in the currency market when the powers-that-be are stomping around in the COMEX futures — and yesterday’s price action was another example of that…if you need to see any more of them, that is.

And here’s the 6-month U.S. dollar index chart.

The gold stocks rallied about a percent right at the open, but it was all down hill from there until the low tick was set around 2:20 p.m. EDT in New York trading — and it crawled higher into the close from there. The HUI closed down 1.99 percent.

The CME Daily Delivery Report showed that 62 gold and 1 silver contract were posted for delivery within the COMEX-approved depositories on Thursday. In gold, the only short/issuer that mattered was HSBC USA with 57 contracts out of its in-house/proprietary trading account. Morgan Stanley was in distant second spot with 4 from its client account. There were five long/stoppers in total — and the two largest were JPMorgan with 40 for its client account…and the CME Group with 13 for its own account. Those 13 contracts were immediately broken up and delivered as 130-ten ounce mini gold contracts. ADM and Advantage were the two big long/stoppers with 98 and 31 for their respective client accounts. In silver, Advantage issued from its client account — and JPMorgan stopped for its in-house/proprietary trading account. The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Tuesday trading session showed that gold open interest in August fell by 11 contracts, leaving 102 still around, minus the 62 mentioned just above. Monday’s Daily Delivery Report showed that only 1 gold contract was posted for delivery today, so that means that 11-1=10 gold more contracts vanished from the August delivery month. Silver o.i. in August remained unchanged at 2 contracts, minus the 1 contract mentioned in the previous paragraph. Monday’s Daily Delivery Report showed that zero silver contracts were posted for delivery today, so there’s just one lone silver contract still open in August.

There was another fairly chunky withdrawal from GLD yesterday, as an authorized participant took out 151,460 troy ounces. There were no reported changes in SLV once again.

I forgot all about the changes in the short positions in both GLD and SLV as of August 15 — and I only remembered it when I saw it in Ted’s weekly review on Saturday…so here’s the data now. There was very little change in SLV, as the short position only declined from 6,672,600 shares/troy ounces, down to 6,752,800 shares/troy ounces…which is a 0.3 percent drop…barely even a rounding error. It was identical in the short position in GLD, as it rose to 925,440 troy ounces, from 917,990 troy ounces…and increased of 1.0 percent.

There was another sales report from the U.S. Mint. They sold 1,500 troy ounces of gold eagles — 1,500 one-ounce 24K gold buffaloes — and 125,000 silver eagles.

It was another all zeros day in gold over at the COMEX-approved gold depositories on the U.S. east coast on Monday.

The only physical activity in silver on Monday was the 1,200,075 troy ounces…two truck loads…that were deposited at CNT. There was also a transfer of 16,106 troy ounces from the Eligible category — and into Registered. That transfer occurred at Brink’s, Inc. The link to that is here.

There was some activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Monday. They reported receiving 1,485 of them — and shipped out 515. All this activity was at Brink’s, Inc. of course — and the link to that, in troy ounces, is here.

Under the “Days to Cover” heading in my Saturday column, I stated the following about the Big 8 traders in the COMEX futures market in silver…

“For the current reporting week, the Big 4 traders are short 118 days of world silver production—and the ‘5 through 8’ large traders are short an additional 63 days of world silver production—for a total of 181 days, which is 6 months of world silver production.

Ted pegs JPMorgan’s short position at around 10,000 contracts, or 50 million troy ounces of paper silver. That works out to a bit over 21 days of world silver production. The short position of the Big 4 traders is 118 days — and once you subtract out JPMorgan’s 21 days, that leaves 118-21=97 days of silver production divided up between the other three traders in the ‘Big 4’ category, or a bit over 32 days of world silver production each on average. So it’s obvious that one trader of the three has a position larger than that amount — and one trader has position smaller than that.

But what should jump out at you here is that no matter how you divide up the short positions of the other three large traders in the Big 4 category…JPMorgan now has the smallest short position of them all.

The four traders in the ‘5 through 8’ category are short 63 days of world silver production in total…which is unchanged from last week’s COT Report. They’re short, on average, a bit under 16 days of world silver production each. The smallest of the traders in this category holds something less than that amount — and the largest, something more than that amount…but neither number by a lot…one full day at most.”

Here’s what I said in those last four paragraphs in chart form. This is an update from a chart I present at the Vancouver resource conference every time I speak there. [Note: if you want to convert these days of world silver production into millions of ounces, multiply by 2.334. If you want these numbers in COMEX contracts, multiply them by 476.] Click to enlarge.

The positions of the ‘5 through 8’ large traders…the four bars on the left…are accurate well within 5 percent of what’s shown — and the position of the No. 4 trader in the Big 4 category…JPMorgan…most likely falls into that category of accuracy as well.

The three largest of the Big 4 includes two Managed Money traders, plus what’s left of Scotiabank’s short position — and whether Scotiabank is the 2nd or 3rd largest short on the COMEX futures market in silver, is open for debate. But two of three largest traders of the Big 4 are of the Managed Money variety. The individual short positions of these three largest traders of the Big 4, are certainly open for interpretation…BUT…it’s a mathematical certainty that the short positions of these three traders must average out to 32 days of world silver production, once you subtract out the 21 days the Ted says that JPMorgan is short.

I have an average number of stories for you today.

CRITICAL READS

Take the death of Senator John McCain, for example. Mrs. Clinton would have promptly hung the black crêpe… and, following protocol, would have sung the praises of the nation’s fallen hero, publicly keening for the noble warrior in a gaudy outpouring of fake grief.

McCain was, after all, one of the people Eisenhower warned us about – a man who parlayed an unfortunate career in the Navy into a lifetime as the wing man for the military/industrial/security complex in the Senate.

He was a decent and brave fellow, according to the accounts we’ve read. But he never met a war he didn’t want to muddle into… or someone else’s money he didn’t want to spend to pay for it.

The Donald could have easily gone along with the formula, too. But the senator had been too good a foil in life — and Trump is too good a showman to let an opportunity pass.

Instead, like Antony putting himself forward over the body of Caesar, Trump came neither to bury nor to praise… but just to use the dead senator as a prop, turning the funeral program into an ersatz reality-show feud, with Mr. Trump, as always, the star.

Bill’s daily commentary put in an appearance on the bonnerandpartners.com Internet site very early on Tuesday morning EDT — and another link to it is here. It’s certainly worth reading.

Now that the raging robo-traders have tagged a double top at 2897 on the S&P 500 it is worth remembering that the booming stock market is the greatest Fake Bull in history. It is entirely a function of massive central bank liquidity injections into the financial system that have transformed Wall Street and other global trading venues into virtual gambling casinos.

Indeed, in today’s fraught environment it can be well and truly said that the chartmonkeys have become deaf, dumb and blind to everything happening on Planet Earth external to the gaming tables where they slosh around in their cups. After all, to use the latest evidence, what could be more indicative of a political system fixing to implode than this weekend’s utterly phony and disgustingly undeserved deification of the late Senator John McCain?

Folks, peek under the surface of the media hagiography. This isn’t about the man’s alleged heroism, virtues and service to America—-because there were none of the above, as we will elaborate tomorrow.

John S. McCain III came from the loin of Leviathan (two generations of Warfare State admirals) and spent every single day of his adult life as an Imperial City payroller, peddling more war, war always and war everywhere. His stock-in-trade was regime change, boots-on-the-ground, spy-state suppression of domestic liberty and hegemonic demonization of any nation (Russia, Iran, Syria, Iraq, etc) that did not bend to Washington’s dictates.

He was also the ultimate enabler of the Bailout State and rogue central bank money printing spree that incepted in September 2008 when McCain suspended his presidential campaign to return to Washington to address the so-called financial crisis.

This longish, but worthwhile commentary by David is posted in the clear over at the Zero Hedge website. It showed up there at 9:45 p.m. EDT on Tuesday evening — and another link to it is here.

The U.S. has been highly successful at pursuing financial warfare, including sanctions. But for every action, there is an equal and opposite reaction.

As the U.S. wields the dollar weapon more frequently, the rest of the world works harder to shun the dollar completely.

I’ve been warning for years about efforts of nations like Russia and China to escape what they call “dollar hegemony” and create a new financial system that does not depend on the dollar and helps them get out from under dollar-based economic sanctions.

These efforts are only increasing.

In the past four months, Russia has reduced its ownership of U.S. Treasury securities by 84% and has acquired enough gold to surpass China on the list of major holders of gold as official reserves.

Russia has almost 2,000 tonnes of gold, having more than tripled its gold reserves in the past 10 years. This combination of fewer Treasuries and more gold puts Russia on a path to full insulation from U.S. financial sanctions.

This commentary by Jim showed up on the dailyreckoning.com Internet site on Monday sometime — and it comes to us courtesy of Brad Robertson. Another link to it is here.

This 8:05 minute video interview with Fox Business host Neil Cavuto was posted on the youtube.com Internet site on August 27 — and I thank Brad Robertson for pointing it out. I’ve only listened to the first few minutes, so you’re on your own here.

Iran’s parliament has censured President Hassan Rouhani, voting on Tuesday to reject his explanations for why the country’s economy is crumbling. Reuters reports this came after Rouhani underwent a grilling in front of parliament on live TV as hardliners gain the upper hand after crippling rounds of U.S. sanctions.

It’s but the latest sign of deep fissures that run to the top of Iran’s government after parliament sacked the minister of economy and finance over the weekend.

This followed the labor ministers sacking as well — both were blamed for not staving off the collapse of the rial and surging inflation.

The dismissal of the now former finance minister Masoud Karbasian is unlikely to do anything positive to halt the downward spiral at this late hour with the rial falling to new lows seemingly on a weekly basis against the U.S. dollar.

The rial fell this past weekend to 107,000 to the dollar, while a year ago it was about 33,000 rials to $1.

It signals an overall trend that conservatives and Islamists are seizing the opportunity to gain momentum over moderates and pragmatists amidst trying to survive economic war with the U.S.

This article appeared on the Zero Hedge website at 8:05 p.m. on Tuesday evening EDT — and another link to it is here.

One week after we reported that China floated a proposal to tax all working adults aged under 40 with the money going to a “maternity fund” to reward families who have more than one child, Beijing appears poised to scrap the limit on the number of children couples can have, with a state-run newspaper Monday citing a draft civil code that would end decades of controversial family planning policies. The wide-ranging code would get rid of a policy that has been enforced through fines but was also notorious for cases of forced abortions and sterilization in the world’s most populous country.

According to AFP, the Procuratorate Daily said the code omits any reference to “family planning” — the current policy which limits couples to having no more than two children. The draft code would go to a vote at the rubber-stamp legislature, the National People’s Congress, in 2020.

In China, couples can now have two children – up from just one as recently as two years ago – but the birth rate is falling despite the new policy.

But couples have been in no rush to start larger families since the policy was loosened, with 17.9 million babies born in 2016, just 1.3 million more than in the previous year and half of what was expected, according to the National Bureau of Statistics.

At the same time, births in 2017 even slipped to 17.23 million, far below the official forecast of over 20 million.

Of course, the bigger question in all of this is whether Japan is providing a glimpse of all our futures? Many of the shifts there are occurring in other advanced nations, too.

Across urban Asia, Europe and America, people are marrying later or not at all, birth rates are falling, single-occupant households are on the rise and, in countries where economic recession is worst, young people are living at home…

This Zero Hedge story from early yesterday morning EDT is an update of a story on China’s demographic slide that I posted about ten days ago. I thank Brad Robertson for bringing it to our attention. Another link to it is here.

President Nicolas Maduro said Venezuela will begin to sell certificates backed by gold ingots as a savings mechanism starting next month.

The certificates, backed by 1.5 grams and 2.5 grams of gold, are meant as tools for pensioners and others to save money and use as credit lines to acquire cars and other items, Maduro said in a televised address. The gold is meant as a more stable way for Venezuelans to hold their diminishing funds as inflation in the socialist nation runs at over 100,000 percent.

“We have found the formula to advance towards socialism, equality and the development of national productive forces,” Maduro said, speaking from Venezuela’s Mint.

Earlier this month Maduro announced a 95 percent currency devaluation and a minimum wage hike of more than 3,000 percent, decisions that were a tacit acceptance of the ubiquitous black-market exchange rate. They accompanied the roll-out of new banknotes that dropped five zeroes — the second time such a measure was implemented in the past decade — to simplify transactions.

Starting Sept. 11, the gold certificates will be sold at around 3,500 sovereign bolivars and 5,800 sovereign bolivars depending on the weight.

This Bloomberg story put in an appearance on their website at 5:20 p.m. Denver time on Monday afternoon — and I found it in a GATA dispatch yesterday evening. The actual headline reads “Venezuela to Sell Gold Ingots to Pensioners as Inflation Soars“. Another link to it is here.

Disposition of 60 pounds of gold bars found in the fuel tank of a military tank that a British military hardware collector purchased on eBay is “still in limbo,” according to the collector.

Nick Mead from Tanks-a-lot Ltd. at Spring Farm, Helmdon, Northhamptonshire, in the United Kingdom, said no determination has been made concerning the five gold bars, which are believed to have been possibly looted by Iraqi soldiers during the invasion of Kuwait in August 1990. The bars were discovered in the spring of 2017 after the tank Mead purchased on eBay was being refurbished. The bars were found during a cleaning of the tank’s fuel tank.

Mead said there has been some outside interest shown in making a movie about the experience of the gold discovery.

Demand for Australian bullion products rebounded in July with gold sales the highest in six months and silver sales more than doubling June’s level when they hit a multi-year low, the latest sales figures from The Perth Mint of Australia show.

The monthly gains happened against a backdrop of falling precious metals with LBMA prices in July dropping 2.4% for gold and 3.7% for silver.

Perth Mint sales of gold coins and gold bars reached 29,921 ounces last month — the most since January, marking increases of 77.6% from June and 26.4% from July of last year.

Their year-to-date total at 170,259 ounces is 15% lower than the 200,337 ounces sold through the first seven months of 2017.

The Perth Mint sold 486,821 ounces in silver coins and silver bars in July, scoring a 112.3% increase from the previous month but dropping 58.3% from July 2017. The strong month-over-month advance was supported by a terrible June when silver sales ran the slowest since CoinNews started tracking the Mint’s monthly data in February 2013.

This precious metal-related news item was posted on the coinnews.net Internet site on Tuesday sometime — and I found it on the Sharps Pixley website. Another link to it is here.

The PHOTOS and the FUNNIES

Today’s ‘critter’ is carabaeus sacer. Its common name is Sacred scarab — and is the most famous of the scarab beetles. It’s a species of dung beetle belonging to the family Scarabaeidae.

To the Ancient Egyptians, S. sacer was a symbol of Khepri, the early morning manifestation of the sun god Ra, from an analogy between the beetle’s behaviour of rolling a ball of dung across the ground and Khepri’s task of rolling the sun across the sky. They accordingly held the species to be sacred.

The Egyptians also observed young beetles emerging from the ball of dung, from which they mistakenly inferred that the male beetle was able to reproduce without needing a female, simply by injecting his sperm into the ball of dung. From this, they drew parallels with their god Atum, who also begat children alone.

Carved relief of the scarab cartouche representing Thutmose III on the wall of the Precinct of Amun-Re, Karnak

The WRAP

Friday’s rally in the precious metals has obviously not been allowed to extend into the following week. It’s certainly obvious that they want to rally — and that has proven to be the case on both Monday and Tuesday. But with the August contract going off the board in a few days — and deliveries in September silver getting underway, it’s not being allowed.

As I’ve pointed out over the last few days, the powers-that-be are also not allowing precious metal prices to reflect the continuing swoon in the U.S. dollar index, either That state of affairs extended into Tuesday’s trading session as well.

But Ted’s ‘locked and loaded’ scenario is still there — and in spades, as there hasn’t been much deterioration since last Tuesday, as the 50-day moving averages in gold and silver have not come close to being violated. Until that event is allowed to occur, the vast majority of the Managed Money traders are going to sit on their hands. Even if there has been deterioration since last Tuesday, a lot of that got reversed during trading in New York yesterday after the afternoon gold fix in London.

Here are the 6-month charts for all four precious metal, plus copper and WTIC. And it should be pointed out that all of the important engineered price decline action that occurred after the COMEX close, doesn’t show up on the Tuesday dojis on the chart below, nor will that data appear in this Friday’s COT Report. Yesterday’s low ticks will appear on Wednesday’s dojis in tomorrow’s column. I also note that WTIC hasn’t been allowed to break back above its 50-day moving average, at least not at the moment. The ‘click to enlarge‘ feature helps with the first four only.

And as I type this paragraph, the London open is less than ten minutes away — and I note that the gold price edged a few dollars higher in the early going in Far East trading on their Wednesday. That lasted until around 1 p.m. China Standard Time — and it has been ticking quietly lower since. At the moment, gold is up $1.30 the ounce. It was about the same price path for silver. It was up a nickel by 1 p.m. CST — and it’s now down 2 cents. Ditto for platinum. It was up 4 bucks at 1 p.m. CST on their Wednesday afternoon, but is only up a dollar now. Palladium was up 4 dollars by around 10:30 a.m. China Standard Time on their Wednesday morning — and has been chopping quietly sideways since — and is still up 4 bucks as Zurich opens.

Gold volume in September is virtually non-existent…48 contracts…as all the price action is now in October and December — and there’s only 396 contracts worth of roll-over/switch volume. Net HFT gold volume in October and December combined is coming up on 50,000 contracts. Net HFT silver volume is only about 2,700 contracts — and there’s 8,432 contracts worth of roll-over/switch volume in that precious metal, most of which is now in December.

The dollar index rallied a large handful of basis points from the 6:00 p.m. EDT open in New York on Tuesday evening, until 10 a.m. CST on their Wednesday morning. Thirty minutes later it was back at about unchanged — and proceeded to chop sideways until another ‘rally’ began very shortly after 1 p.m. CST. It has been chopping quietly but unsteadily higher ever since — and is up 14 basis points as London opens.

As I alluded to a few paragraphs ago, the cut-off for this Friday’s Commitment of Traders Report came at the close of COMEX trading yesterday — and all of the price decline data that occurred after that [on the back of a 40-minute long dollar index ‘rally’ that began at 1:40 p.m. EDT] won’t be in it. Was that a deliberate act on the part of ‘da boyz’ you ask? Without doubt.

I was asked by one of my readers to repost a list of the precious metal companies I have shares in, so here it is. I also own a couple of precious metal mutual funds as well, but they don’t show up on this list. I’m not sure if the ‘click to enlarge‘ feature will help or not.

And as I post today’s column on the website at 4:02 a.m. EDT I see that the dollar index had a down/up move of some size starting at five minutes before the London open. Fifteen minutes later it was in rally mode once again — and is up 8 basis points currently. Three of the four precious metals had up/down moves following the dollar index. Gold, which had been up almost 4 dollars at one point, is now up only $1.30 — and silver, which had been up 3 cents, is now down 5. Platinum was up 5 bucks at one point after the Zurich open — and is now up only 2 bucks — and palladium, which had also been up 5 dollars, has been hammered back to down a dollar as the first hour of Zurich trading draws to a close.

Gross gold volume is coming up on 69,500 contracts — and net of what little roll-over/switch volume there, net HFT gold volume in October and December combined is a bit under 69,000 contracts. Net HFT silver volume is only about 3,500 contracts — and roll-over/switch volume out of September and into future months in that precious metal is up to a bit over 11,500 contracts.

As I stated a couple of paragraphs ago, the dollar index topped out at the 94.88 mark about five minutes before the 8:00 a.m. BST London open. It sagged about a dozen points from that juncture — and began to head higher about fifteen minutes later — and is currently up 8 basis points.

Right now it appears that JPMorgan et al have the precious metals in ‘care and maintenance’ mode — and we’re still waiting for the ‘event’ that will be allowed to set it off. The price activity so far this week certainly does nothing to dispel that notion.